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Hackney’s charge vat, there not vat registered.

Partially right, MCF.

Like any other business, the prices charged either include VAT or don't depending on whether the business is VAT-registered.

Some HCs are VAT-registered (but not many) so to that extent the fare charged will include VAT. So just like PHVs.

The purpose of the statement you allude to, I think, is to stop VAT-registered HCs adding VAT to the council controlled tariffs. So the customer will pay the same irrespective of whether or not the HC is VAT-registered.

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Justice for the 96. It has only taken 27 years...........repeat the same lies for 27 years and the truth sounds strange to people!

So nearly 9 months after the hearing there is no sign of any judgement.

I'm pretty sure this isn't a case of a lazy judge.

Maybe the government is being given time to put legislation in place to change the law, or prepare for the negative (in my view) outcomes from this judgment.

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IDFIMH

well the result is finally in CC has made a rare visit and posted it in the court database but here's the taxipoint article

https://www.taxi-point.co.uk/post/uber-versus-sefton-landmark-court-ruling-set-to-shape-taxi-and-phv-sector-announced-today#:~:text=The%20Supreme%20Court's%20ruling%20declared,to%20pay%20VAT%20on%20rides.

A highly anticipated court decision, which could shape the future of the taxi and private hire vehicle (PHV) sector, will be delivered today
The ruling in the case of ADCU v Sefton Council will have far-reaching implications for PHV worker rights and the business models of operators in England, excluding London.

The App Drivers and Couriers Union (ADCU) emphasised the gravity of the ruling, stating that the worker rights of drivers outside of London are ‘critically at stake’.

The court case, which commenced in November 2022, involves ride-hailing giant Uber challenging Sefton Council. If Uber's argument prevails, it could result in significant changes to the contractual relationships between operators and drivers in the private hire vehicle (PHV) industry, making all PHV operators responsible for VAT on fares. This change would inevitably increase the cost of journeys by at least 20 percent throughout England.

Following a protracted legal battle over workers' rights in London, Uber had to undertake substantial changes to its business model. The Supreme Court's ruling declared Uber as the "principal," which had sweeping implications for tax purposes, specifically forcing Uber to pay VAT on rides. In response, Uber implemented VAT charges on bookings in March 2022 which subsequently forced other private hire operators in London to follow suit at a later date.

Transport for London (TfL), the largest licensing authority in the UK, were forced to ask minicab operators to take immediate action to ensure compliance. This entailed making amendments to their terms and conditions and operating models to align with the new tax requirements.

With this latest legal action, Uber aims to bring uniformity to the industry nationwide by posing a question that would push all operators to pay VAT on all journeys and provide basic working rights.

Industry stakeholders are eagerly awaiting Mrs Justice Foster‘s landmark decision that could have far-reaching consequences for the structure of PHV business models.

now why couldn't they have just read the judgement and then wrote the article

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

from the conclusion

I have come to the clear conclusion that UBL's suggested construction of the 1976 Act is correct.
Accordingly, the question posed is to be answered "yes". The reasoning is as follows.

the judgement then lists all the reasoning

so Uber won then and I'm sure all the big PH operators such as delta will be cock a hoop about it

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

It will have massive tax implications for operators, and in time the ‘worker’ status issues will have to be addressed.

The Judge has basically told councils they need to add a requirement to operator licenses ensuring they are the principle for all booking they accept.

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IDFIMH

And to paraphrase what the judge said in response to submissions made by the operators that this could lead to fare increases.

She said, sort of, ‘I couldn’t give a f***’.

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IDFIMH

It is this that made us change from Hackney to PH. As a hackney VAT could not be added to a fare, it was part of the fare but as PH we were free to increase our prices to take account of the VAT.

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Grandad,

there are some grey areas though because there are operators who own fleets of hackneys filled with split purse drivers.

Now the only difference between them and a PH company is that the cars are hackney . Some of the wording in that judgement suggests that it doesn't apply to hackneys so does that put such operators outside the scope of the judgement ?

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lack of modern legislation is the iceberg sinking the titanic of the transport sector

I alluded to this issue in the court case thread, if an operator passes work to a hackney carriage, then in theory the HC will have to charge VAT and pass that back to the operator.

But, as we all know, hackneys can’t charge more than the set tariff? So do they run at a loss, or will the legal view be taken that as hackney don’t need to meet the operating requirements of the 1976 act, then operators can act as agents for them.

But then reading the judgement the view taken by the court is that the contractual requirement applies to how the work is received, not how the work is despatched. Unless the firm is a 100% hackney firm, who currently doesn’t need to license as an operator.

So my initial view is that this will apply to hackneys if the work is despatched by a licensed PH operator.

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IDFIMH

Following on from what I wrote in the previous post above, I think if the work is passed from an operator licensed under the 1976 act then the job will have to include VAT. Whether that’s a 100% PH firm, or a 100% HC firm, or a mixed fleet.

The judgement a number of times said the issue isn’t who the job is despatched to, it’s who accepts the booking in the first place. Thus the driver/vehicle that fulfils the booking matters not.

So the only way around this for hackneys is to work on a circuit that’s 100% hackneys, and that firm mustn’t be licensed.

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IDFIMH

Edders, indeed the judgement isn't about HCs, but the point is, why shouldn't it apply to HC circuits?

It's like for years the 'experts' have been saying that Uber is a different beast but, as yesterday's decision makes clear, in reality it's not, whatever the arguments the likes of Delta and Veezu adduce to claim that they're different. And that Uber is no different is what some of us on here have been saying from the off. And that's both from the VAT and employment status perspectives.

By the same token, the experts, lawyers and judges all view HCs as a different beast. Indeed, yesterday's judgement says:


But that's just the straightforward case of plying for hire, and doesn't cover circuits. I mean, if a mixed circuit dispatches an HC or a PHV, is the VAT position going to be different? Or an all-HC circuit?

Don't know much about VAT law, but there's a thing that's often cited called substance over form - whatever the letter of the law says, what matters is the reality of the transaction in economic terms. To that extent, what's the difference between an HC on a circuit or a PHV on a circuit in practical and economic terms, irrespective of what licensing law says? And, to that extent, why should they be treated any differently as regards VAT?

Of course, there was the recent Bournemouth case which essentially said an HC jockey on a circuit should be given worker status, thus just like an Uber driver. As I recall it, the fact that the driver might do the odd street job was irrelevant, because he was largely controlled by and dependent on the circuit. I'd guess that if the authorities examined HCs circuits then they'd come to the same conclusion as the High Court did yesterday with regard to PHVs.

And one big difference, I suspect, is that the applicability of the employment status thing depends on individuals and groups taking action against local firms, which the vast majority can't or won't do.

On the other hand, HMRC will I'd guess be more proactively applying yesterday's ruling with regard to its applicability to VAT liability, therefore...

A huge can of worms may be in the process of being opened up

There's quite a good article on TaxiPoint with quotes from the case and from various interested parties. Won't post it all on here, but couldn't help notice the quotes from the ADCU



https://www.taxi-point.co.uk/post/court ... in-england

Maybe it's just me, but it stretches credulity to think that HMRC will consider the circuit to be the contractual principal when it's a PHV operator, but not an HC circuit. I mean, HC circuits aren't licensed, so it wouldn't even need a legal case like Sefton's for HMRC to change the VAT position

It just doesn't ring true for the principal/agent position to be different depending on whether it's an HC or PH circuit. An all-HC circuit isn't regulated by licensing, but contractually the two types of circuits are identical with regard to passenger bookings, surely?

I'm not an expert on the Scottish booking office legislation, but interestingly it applies identically to HCs and PHVs